City officials from Pennsylvania and around the nation yesterday appealed to the Reagan administration for help in modifying a Supreme Court decision which could cost them more than $1 billion.

In a meeting with White House staff yesterday, the local government officials sought White House support as they turn to Congress for relief from the high court's decision in Garcia vs. San Antonio Metropolitan Transit Authority which applies the federal Fair Labor Standards Act to state and local governments.

The Garcia decision, which affects about 7 million local and state employees and several million volunteers, applies the overtime provisions, minimum wage, recordkeeping and other requirements of the federal act to cities, other local government units, and state governments.

The cost of complying with the overtime provisions alone, according to the National League of Cities, will be well in excess of $1 billion.

The U.S. Department of Labor in June announced it will begin enforcement of the Act on October 15 and it will impose liability on states and localities retroactive to April 15.

An estimated 500 lawsuits have been filed nationally by state and local employees seeking back pay and damages under the federal act, according to the department.

"My impression is the administration is with us on this one," York Mayor William Althaus, president of the National Conference of Republican Mayors, said after the White House meeting.

Althaus said the effect of the Garcia decision would mean higher taxes, reduced public services, or layoffs of employees.

"For a community like mine - and while I can't speak for Joe Daddona in Allentown, I suspect for him too - we're just not going to do some of things we now do," Althaus explained. "These things include community relations and public service projects. I'm not going to raise taxes. I'm going to stop doing these things."

A major concern of the cities is the requirement that they pay overtime compensation on a cash basis rather than in the form of compensatory time for all hours worked in excess of 40 hours per week. The National League of Cities contends that all cities will incur significant new costs. Los Angeles, the League reports, estimates its costs will range from $50 million to $100 million; Chicago, $20 million; New York City, $40 million, and Baltimore, $10 million-$17 million.

The city officials yesterday also voiced concern about the impact of the Garcia decision on volunteers, particularly volunteer firefighters.

If the federal act applies to volunteers, a firefighter who gets more than a nominal stipend of $2.50 per call must be considered a regular employee unless the city can prove the volunteer incurred expenses of more than $2.50. As a regular employee, the city would have to pay that volunteer minimum wages and overtime.

"In Pennsylvania, the impact would be to cut services," predicted John Garner, executive director of the Pennsylvania League of Cities. "You're not going to pay 'volunteers,' because if you did, you might as well employ them."

Garner and Althaus said Reagan officials appeared sympathetic to the cities' concerns but would not endorse a specific plan for relief during their meeting.

"They gave us every indication to believe that when they testify at the congressional hearing in September, they will support a modification of the law," Garner said.

The city officials said they support, and urged the Reagan administration to support, bills now pending in Congress to do basically three things:

- Permit local and state governments to continue to use compensatory time as payment for overtime worked.

- Redefine the term "volunteer" as it applies to municipalities.

- Eliminate the retroactive liability.

"We have a difficult legislative task ahead of us," Alan Beals, executive director of the National League of Cities, said. "It is late in the legislative session and the agenda is crowded. We're trying to alert the Congress that this is a very important issue to local governments and we need relief."

Garner said the Pennsylvania League is presently trying to estimate the cost to Pennsylvania cities of compliance with Garcia. He noted that cities would be asked to comply at a time when their financial resources are being severely constrained and federal assistance, such as revenue sharing, is endangered.